CALGARY, ALBERTA–(Marketwired – Feb. 8, 2017) – Chinook Energy Inc. (TSX:CKE) (“Chinook” or the “Company“) is pleased to announce the following non-core asset disposition and its capital program and guidance for 2017.
Disposition of Non-Core Knopcik/Pipestone Assets
On January 23, 2017, Chinook completed the sale of certain of its non-core assets located in the Knopcik/Pipestone area of Alberta (the “Knopcik/Pipestone Assets“) for net consideration of approximately $7.5 million, subject to customary closing adjustments pursuant to a sale agreement dated January 20, 2017. The Knopcik/Pipestone Assets included 15.8 net sections of land, of which 5.25 net sections would have necessitated drilling activity in 2017 prior to expiry. The disposition has no impact on Chinook’s funds flow or reserves and is consistent with its strategy of rationalizing its non-core assets to further focus on its Montney liquids-rich natural gas positions at Birley/Umbach, British Columbia where it is in the process of completing and tying-in three (2.6 net) wells.
Chinook filed a material change report in respect of the asset disposition on a confidential basis in reliance on subsection 7.1(2) of National Instrument 51-102 on January 23, 2017 pursuant to a request from the purchaser due to its need for confidentiality until this time.
Chinook estimates that its working capital surplus will be $25 million as at March 31, 2017.
2017 Capital Budget
Chinook’s Board of Directors approved a $40 million capital program for 2017 focusing on the development of liquids-rich natural gas at Birley/Umbach, British Columbia. This capital budget will allow Chinook to drill, complete and tie-in six (4.5 net) wells prior to December 31, 2017 in addition to the three (2.6 net) wells currently being completed and tied-in. This capital budget will also fund the expansion of Chinook’s 25 mmcf/d compressor station at Birley/Umbach to 50 mmcf/d. Chinook’s pace of Montney development will continue to be prudently managed to demonstrate growth from its Montney assets while maintaining a strong balance sheet.
Chinook’s guidance for 2017 is as follows:
|(millions, except boe/d)||FY 2017 Guidance|
|Average production (boe/d)||4,070 – 4,170|
|Exit production (boe/d)||6,000 – 6,150|
|Working capital surplus as at December 31, 2017||$3|
About Chinook Energy Inc.
Chinook is a Calgary-based public oil and natural gas exploration and development company which is focused on realizing per share growth from its large contiguous Montney liquids-rich natural gas position at Birley/Umbach, British Columbia.